After sharing with investors that profits are expected to fall for the remainder of the year due to inflation, Walmart shares have started dropping, falling by almost 9% after hours on Monday.
The projections for the nation's largest retailer were released on Monday as the company said it expects high prices to affect its customers' "ability to spend on general merchandise categories and requiring more markdowns to move through the inventory, particularly apparel."
High costs for food and other merchandise have forced Americans to rethink how they spend their money as they reach deeper into their wallets than ever before.
In June, inflation hit 9.1%, leaving some economists hopeful that it has peaked, especially with costs for some things in the fuel and food industries falling.
Still, Walmart shared that it would be cutting prices more on clothing and other items that it needs to clear out inventory.
In the release from the company, president and chief executive officer Doug McMillon shared that inflation has forced the company to reevaluate its pricing.
"The increasing levels of food and fuel inflation are affecting how customers spend, and while we've made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars," McMillon said in the release.
McMillon thinks there will be more price pressure on general merchandise for the second half of the year, but he said that back-to-school shopping was showing promising signs.
"Customers are choosing Walmart to save money during this inflationary period, and this is reflected in the company's continued market share gains in grocery," the company said.
Walmart is currently set up to report quarterly results next month, and excluding fuel, comparable sales are expected to be up 6%. Still, it is weighted toward lower-margin food and consumer basics.
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